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Author Topic: RentalStarter - A Midwest Real Estate Investment Company  (Read 118961 times)
tempestb
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July 08, 2014, 03:10:26 PM
 #621

^Not complaining.  Chuckling a bit under my breath, that's all.  Can you blame me?  
When you sold your first IPO, did you not realize "Real estate investment is debt/capital heavy"?  How about when you sold your second?  Did it become clearer then?

Amuse me a bit more, though:  Will your current "investors" be required to provide personal info, a la VirtEx (VTX), for SEC compliance?
Will non-accredited investors be sent packing?
This is fascinating stuff!

You seem confused or purposely trying to poke holes in something that is and has been pretty clear to everyone involved, except you.  Or you are fine with it, and are trying to produce FUD to get a lower share price.

The IPO was setup in rounds.  After the first round, Branny had another one.  Was all explained in detail, everyone knew about it.  There were other planned rounds if I'm not mistaken.  I think a total of 5?  This is not unusual, many securities are structured the same way.  Branny owns those shares, he can sell them if he wants to.  Just like you can if you owned any.

What Branny is trying to do isn't Ponzi.  He isn't taking the investments people make and then paying the people with those same dollars.  He's buying houses and paying investors a percentage of the income from the renters.  Pretty clear.  Would be the worst Ponzi ever considering the gains we're seeing.

The second offering, and now loan, is being done to gain enough properties to have leverage.  The fund has enough physical assets to cover the loans if anything goes sour.  He just sells off some property and we're straight.

Otherwise, it would take years to build up enough income with the few properties that he currently has, to purchase more properties.   However, once he has the loan and purchases the new properties, even with the loan payments, the income would then be high enough to allow continued expansion and investment in new properties, and thus the business grows.

This has been one of the most transparent and well communicated investments I've been involved in, and I've been in involved with dozens of them.  If you're not here to invest, go complain in one of the hardware manufacturing threads.  There is plenty to complain about there.

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July 08, 2014, 03:30:39 PM
 #622


...If you're not here to invest, go complain in one of the hardware manufacturing threads.  There is plenty to complain about there.


Believe me, he does. In fact, I'd say he's the most hardworking troll on this forum.
It's semi-informed drivel at best, but I can't figure out what his motivation is to pump out such a volume of it.

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July 08, 2014, 03:33:23 PM
 #623

NotLambChop is conducting his personal crusade against all the funds that are in havelock, now has landed here too, i'm tired of his posts so clicked ignore... all ignore him too...

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July 08, 2014, 03:42:24 PM
 #624

So...  An Asian company selling unregistered securities to American persons through an unlicensed Panamanian exchange is filing with the SEC.  While trying to raise some scratch on BTCjam because banks won't deal with it.  A couple of months after issuing a second IPO to raise said scratch.

Where to begin...


Have you read this?  http://www.sec.gov/rules/proposed/2013/33-9470.pdf

Bump.  If you haven't read the SEC's proposed rules, then...  Roll Eyes


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NotLambchop
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July 08, 2014, 04:26:21 PM
 #625

@tempestb:
Lolno.  In the first prospectus revision, Branny states that over the course of six years, "[RentalStarter] has maintained an average simple return of about 24%," promising to pass on 70% of these profits (which translates to ~17%) to his investors.  Current returns, according to Havelock's "Yield" is 4.11%, or ~1/4 of what the original "contract" projected.

4.11% yearly yield.  As the share price drops by ~20% from first IPO price, and 40% from the second.  To translate that for the math-challenged, those who bought in @ first IPO have lost  ~17% of their money, while those who bought in @2nd have lost ~38%.
Very profit.
Much wow.

Curiously, this "contract" makes no mention of borrowing money at exorbitant rates or sampling the crack of real estate investors--flipping houses.

The "contract" ends on a curious note:  "To comply with SEC regulations, we currently do not allow investment from US entities."  Branny then goes on to market this "security" on an unlicenced Panamanian exchange, which makes no effort to screen US investors.  The quoted clause may have seemed like a reasonable nod to teh SEC a few years ago, when Bitcoin was bush-league and attracted nominal attention from the regulators.  Today, and in light of Branny's claim to register his Asian-registered shell with the SEC, it's simply begging to be milked for lel.

I understand that, finding oneself stuck in a ponzi scheme, the only reasonable course of action for one to take is denying it is a ponzi.  Acknowledging this situation for what it is would preclude any possibility of a graceful exit.  Please understand that I'm not judging you for acting in your own self-interest--this is to be expected.

OTOH, as I'm sure you understand, allowing this continue garners horrible publicity for Bitcoin as a whole, and why I think it best to put an end to this thing.
Thanks.

@jjdub7:  proposed != current.  
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July 08, 2014, 04:33:59 PM
 #626

@tempestb:
Lolno.  In the first prospectus revision, Branny states that over the course of six years, "[RentalStarter] has maintained an average simple return of about 24%," promising to pay 70% of return (which translates to ~17%) to his investors.  Current returns, according to Havelock's "Yield" is 4.11%, or ~1/4 of what the original "contract" projected.

4.11% yearly yield.  As the share price drops by ~20% from first IPO price, and 40% from the second.  To translate that for the math-challenged, those who bought in @ first IPO have lost  ~17% of their money, while those who bought in @2nd have lost ~38%.
Very profit.
Much wow.

Curiously, this "contract" makes no mention of borrowing money at exorbitant rates or sampling the crack of real estate investors--flipping houses.

The "contract" ends on a curious note:  "To comply with SEC regulations, we currently do not allow investment from US entities."  Branny then goes on to market this "security" on an unlicenced Panamanian exchange, which makes no effort to screen US investors.  The quoted clause may have seemed like a reasonable nod to teh SEC a few years ago, when Bitcoin was bush-league and attracted nominal attention from the regulators.  Today, and in light of Branny's claim to register his Asian-registered shell with the SEC, it's simply begging to be milked for lel.

I understand that, finding oneself stuck in a ponzi scheme, the only reasonable course of action for one to take is denying it is a ponzi.  Acknowledging this situation for what it is would preclude any possibility of a graceful exit.  Please understand that I'm not judging you for acting in your own self-interest--this is to be expected.

OTOH, as I'm sure you understand, allowing this continue garners horrible publicity for Bitcoin as a whole, and why I think it best to put an end to this thing.
Thanks.

@jjdub7:  proposed != current.  

JOBS Act = current

And keep in mind that:
- profit/loss, as well as yield, mentioned in the IPO are largely based on the BTC-USD price, which you completely (intentionally?) ignore.  This asset's BTC price is largely driven by the USD price, as it should be due to the USD resale value of its assets.  The 2nd IPO you mention occurred when the BTC price was $400, so the drop in price is really more of an adjustment based on the associated decrease in expected future divs relative to the current exchange rate.  That's asset pricing 101.  
- the asset can hardly be classified as a Ponzi scheme with the retained equity (housing) being a good with relatively inelastic demand (people need homes)
- the "contract" you speak of is the executive summary on the asset page.  The detailed business plan included in the offering does mention leverage options (quite extensively, actually), detailing the types of market interest rates that borrowing capital would entail

While you've made some very relevant points concerning other asset offerings on the exchange, you're really striking out here.  Your analysis completely neglects that asset prices are largely affected by the availability of substitutes, the forex risk and rates involved with trading in BTC-denominated assets, and the fact that trading in BTC-denominated assets has only a single incidence of capital gains taxation on the investor side (upon the sale of BTC into fiat, which many investors have no intention of executing in the near-term).

Furthermore, the (yes) proposed guidelines do not supersede the crowdfunding provisions set forth by the JOBS Act, namely that crowdfunded companies have up to 5 years to comply with rules set forth by the Sarbanes-Oxley legislation and that online crowdfunding portals may accept unaccredited investors as long as the number of unaccredited investors does not exceed 500, the equity purchased annually by unaccredited investors does not exceed $2000 or 5% of their yearly income (for those grossing <$100k annually), and that the company does not raise more than $1 M on an annual basis.  Beyond even these stipulations, there are no stipulations regarding the cost basis for investors with respect to the bitcoin they invest, meaning that if an investor purchased the BTC at a low price, there are no regulations in place to say they may only hold up to $2000 of the current value of those bitcoins (as this would be an undue accounting burden on unaccredited investors).

Branny has also made plans to contract a licensed outside auditor to provide the required disclosures.

You obviously haven't read the core legislation (both current and pending) that applies to this listing.  There are possibilities for exemptions to every provision set forth in these laws due to the disruptive and novel nature of the crowdfunding concept.  By making every effort to comply with the cut-and-dry parts of the legislation, Branny is minimizing the regulatory risk both to the company and to investors.  With the Fed's goals currently set on reviving the housing market (and SEC's role as the Fed's reagent), I would assume that the value-add both to the central Ohio real estate market, the ambiguity related to BTC-denominated equity issuance, and Branny's desire to comply with regulation would leave Rental Starter with relatively good chances of being approved, even if only on a probationary basis.

It behooves a watchdog to bark, but you're barking at the fucking mailman.


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NotLambchop
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July 08, 2014, 04:44:37 PM
 #627

^Please don't confuse the issue.  The bill specifically prohibits the crowdfunding of investment funds.
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July 08, 2014, 05:18:09 PM
 #628

^Please don't confuse the issue.  The bill specifically prohibits the crowdfunding of investment funds.

Which JOBS Act are you reading (or still not reading)?  Try Title III of H.R. 3606 - it amends the Securities Act of 1933.


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NotLambchop
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July 08, 2014, 05:42:40 PM
 #629

http://en.wikipedia.org/wiki/JOBS_Act.

Feel free to chime in on all the other points Smiley

* "Almost all private funds are deemed to be "investment companies" under the Investment Company Act, and "investment companies" are required to register under the Investment Company Act of 1940 (the "Investment Company Act") (similar to what mutual funds must do) unless they fall within an exemption from the registration provisions."

http://www.lexisnexis.com/legalnewsroom/banking/b/venture-capital/archive/2012/04/24/you-cannot-crowdfund-a-fund-in-case-you-were-wondering.aspx
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July 08, 2014, 06:00:10 PM
 #630

Mmhmm, and you think that the SEC is going to waste its time coming down on Rental Starter ex post facto before/instead of pushing the proposed revisions (i.e. Title III) through first?  When they have bigger fish to fry?  Trololol, that's rich.

I'm done, I've made my points.  You've chosen one out of every ten to respond to, citing defunct legislation (via Wikipedia rather than reading the actual bills) without any economic backing to support your paper mache FUD.  Every one of the investors in on this project have been through far shittier offerings in the past and know what they're doing by now.


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tempestb
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July 08, 2014, 06:03:44 PM
 #631

I'm only three hours away from where Branny operates.  If the thing suddenly went South, I can drive down there and punch him in the throat.  So I have no worries about it being a Ponzi, at all.  You seem to be the only person in here being dumb and having concerns.  And I'm sure you're not an investor.  All the information about what is going on and has been happening is in this thread.  Branny answers PM's and posts on here with very clear information even to trolls like you.

And at no point did I say we made profit.  I said Branny distributes income from the houses.  It's all very clear.  It's a growing business.  You don't always make dividends on stock purchases.  Sometimes you wait for the growth to end before dividends are distributed.  You either do your homework when you invest, or you don't.  Some of us do.

Go away fly... 

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July 08, 2014, 06:06:11 PM
 #632

Mmhmm, and you think that the SEC is going to waste its time coming down on Rental Starter ex post facto before/instead of pushing the proposed revisions (i.e. Title III) through first?  When they have bigger fish to fry?  Trololol, that's rich.
...

Lolno.  Just like the cops won't go after Dimebag Pedro.  OTOH, if Dimebag Pedro walks into a police station and goes on record as a dealer of dimebags, i'm sure they'll take him in.
Branny, if you will remember, is in the final stages of registering with the SEC to garner some tasty VC cheddar--that's what I found particularly lulzy.
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July 08, 2014, 06:08:15 PM
 #633

I'm only three hours away from where Branny operates.  If the thing suddenly went South, I can drive down there and punch him in the throat...

As i said:
@tempestb:
Lolno.  In the first prospectus revision, Branny states that over the course of six years, "[RentalStarter] has maintained an average simple return of about 24%," promising to pass on 70% of these profits (which translates to ~17%) to his investors.  Current returns, according to Havelock's "Yield" is 4.11%, or ~1/4 of what the original "contract" projected.

4.11% yearly yield.  As the share price drops by ~20% from first IPO price, and 40% from the second.  To translate that for the math-challenged, those who bought in @ first IPO have lost  ~17% of their money, while those who bought in @2nd have lost ~38%.
Very profit.
Much wow.

Curiously, this "contract" makes no mention of borrowing money at exorbitant rates or sampling the crack of real estate investors--flipping houses.

The "contract" ends on a curious note:  "To comply with SEC regulations, we currently do not allow investment from US entities."  Branny then goes on to market this "security" on an unlicenced Panamanian exchange, which makes no effort to screen US investors.  The quoted clause may have seemed like a reasonable nod to teh SEC a few years ago, when Bitcoin was bush-league and attracted nominal attention from the regulators.  Today, and in light of Branny's claim to register his Asian-registered shell with the SEC, it's simply begging to be milked for lel.

I understand that, finding oneself stuck in a ponzi scheme, the only reasonable course of action for one to take is denying it is a ponzi.  Acknowledging this situation for what it is would preclude any possibility of a graceful exit.  Please understand that I'm not judging you for acting in your own self-interest--this is to be expected.

OTOH, as I'm sure you understand, allowing this continue garners horrible publicity for Bitcoin as a whole, and why I think it best to put an end to this thing.
Thanks.

@jjdub7:  proposed != current.  

Oh, almost forgot...

  ~Happy investing!
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July 08, 2014, 06:23:33 PM
 #634

I for one, like NotLambchop's posts. Yes, they are, to the posts I've read, always negative. But that is good. He's pointed out things I have missed, and I thank him for it. Is posting additional information, questions, scrutinizing everything, and gathering additional information such a bad thing?

If a thread was ONLY positive, such as all those scam and failed IPO's I've seen, I'd be wary. I've been burnt on a few things when I first got into bitcoinland due to my inexperience, and wish there had been more people being the naysayers.

Caveat emptor.

Disclaimer: I'm invested into RentalStarter

Making Apps and Websites for people. I charge reasonable rates ($30-40/hour in BTC).
tempestb
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July 08, 2014, 07:47:34 PM
 #635

I think asking Branny for clarification on things is fine.  But now he's being ridiculous saying it's a Ponzi.  That comes off like he's got some vendetta and isn't even an investor or even wants to be.

Anyway, I'm not going to argue why I invest in Branny.  I think he's doing a great job. 

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jjdub7
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July 08, 2014, 08:05:15 PM
 #636

I for one, like NotLambchop's posts. Yes, they are, to the posts I've read, always negative. But that is good. He's pointed out things I have missed, and I thank him for it. Is posting additional information, questions, scrutinizing everything, and gathering additional information such a bad thing?

If a thread was ONLY positive, such as all those scam and failed IPO's I've seen, I'd be wary. I've been burnt on a few things when I first got into bitcoinland due to my inexperience, and wish there had been more people being the naysayers.

Caveat emptor.

Disclaimer: I'm invested into RentalStarter

No you're right, its good to chip away at any possible holes to make sure issuers are being honest.  The Providence (PROV) ASIC offering was picked apart this way and for good reason, as they were evaluating the company at an absurd level, giving only ~2% to investors.

Are there risks with Rental Starter?  Oh hell yeah, just as there are risks with any investment.  There's a difference though between communicating risks in a balanced way and launching into a Y2K-esque hysteria about how everything's a Madoff scheme.

Now granted, most are - and to reiterate what I've previously stated and be fair, I've agreed with NotLambchop on 95+% of his other equity reviews.  The community does (desperately) need watchdogs like Puppet and NotLambchop.  They provide a very valuable and necessary vetting service to warn investors of the duds.

The value behind this equity is that (1) Branny himself is invested in it with his time and money, (2) the ambiguous regulatory environment, in my opinion, currently leans toward allowing the type of investment core to Rental Starter's business plan, and (3) relatively speaking American real estate is cheaper than blow in Bogota right now, and (4) post-housing crash, with these low prices, the price-to-rent (analogous to/same thing as gross P/E for stocks) ratio is looking better than ever as people continue to shift toward renting vs. buying housing (especially younger people with outstanding student debt and young families working to build credit).

You're right to request a view of the risks involved here.  Many have already been covered, but I will create a list summarizing those which could impact the business the most.  I think that this is definitely healthy, and I also feel that this asset's investor community is one of the few that might be able to do so without verbally butchering each other in the process.

jjdub7's Projected Risks & Mitigations:

- Illiquidity:

Unavoidable, especially in the early stages and after BTC/USD-volatility-induced selloffs and due to the nature of listing on Havelock, but will decrease over time as the company maintains a successful track record and Havelock finally sifts through enough garbage to find the diamonds in the rough worth listing.

Probability: short-term medium-high; long-term unknown, optimistic

- Regulatory:

Rejection by the SEC for registration (if this does happen, keep in mind that investors could still restructure their equity in the company in a manner that complies with finalized regulation).  In this case, personally I would consider becoming an accredited investor to maintain my equity, though I realize this option is not open to everyone.

Probability: unknown, optimistic.  As detailed in my earlier posts, this will largely depend on the SEC's evaluation of Branny's character/mgmt ability/records/business plan, the resources (i.e. auditors) he chooses for 3rd party functions, Rental Starter's continued compliance with applicable tax law, leverage levels and financials, and levels of current capital raised vs. what has been returned to investors at this stage.

- Housing market volatility:

Similar to what caused the '08 mortgage crisis, if the housing market were to take a further dive, Rental Starter could run into solvency issues with its creditors.  This can be mitigated through proper planning of loans, structuring of dividends, and maintenance of cash flows and working capital - it is not rocket science.  There are tried-and-true methods of doing this.

Probability: unlikely, due to the current record-low state of the market.

- Forex Risk (i.e. the BTC/USD factor)

The asset price, as determined in BTC, will likely fluctuate with the US dollar, as both revenues and assets are priced in USD markets.  Because dividends are received in BTC, however, it is my understanding (anyone with a CPA and knowledge of BTC tax liability - verification on this would be great) that only when gains or losses are realized in USD do investors become liable for a capital gains tax burden (20%, because the money is generated from capital investment into a commodity, which may change according to IRS views of BTC/cryptos - detailed below).  This is in contrast to mining operations, which would cost investors their marginal income tax rate of the proceeds, as mining is currently classified as income.

Overall, not a huge issue, as the dollar value of your RENT investment will hold.  This attribute will actually mitigate the forex risk across the rest of investors' BTC portfolios (portions of the portfolio which have yields driven by BTC-denominated revenues) since it functions to balance (hedge) the portfolio against such currency fluctuations.

- Tax Risk (i.e. the IRS factor)

The same risk inherent across the BTC equity spectrum - how the IRS will classify tax liabilities of investments in BTC and BTC-denominated equities.  Currently BTC is considered a commodity by the IRS, but this could change.  For more ont he topic, read up on the cryptocurrency bill recently passed by the California legislature and signed by Gov. Brown, as well as a federal-level bill sponsored by Congressman Stockman of Texas.


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NotLambchop
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July 08, 2014, 08:38:39 PM
 #637

While we're exploring improbabilities, here are a couple you might consider:

- Havelock vanishes.  I know, impossible, except for the long, sordid history of vanishing/mysteriously hacked exchanges.

- Branny vanishing.  Again, unthinkable!  But not as unlikely as NEOBEE's Danny Brewster, Bitcointalk's  most public entrepreneur, vanishing.

What's Branny's name, BTW?
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July 08, 2014, 08:57:37 PM
 #638

While we're exploring improbabilities, here are a couple you might consider:

- Havelock vanishes.  I know, impossible, except for the long, sordid history of vanishing/mysteriously hacked exchanges.

- Branny vanishing.  Again, unthinkable!  But not as unlikely as NEOBEE's Danny Brewster, Bitcointalk's  most public entrepreneur, vanishing.

What's Branny's name, BTW?


Already discussed both of these things.  You should maybe read the thread and not pretend that we haven't done due diligence.  If you're going to look him up on Google and find his Real-Estate license and such, we've done that all too.  Maybe read the thread, it'd be good for you to do that.  You might learn something.

 

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NotLambchop
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July 08, 2014, 09:01:54 PM
 #639

What can be simpler than giving the full name of your asset issuer?  This is not a game.  Again, what is his name? 
Branny
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July 08, 2014, 09:02:10 PM
 #640

While we're exploring improbabilities, here are a couple you might consider:

- Havelock vanishes.  I know, impossible, except for the long, sordid history of vanishing/mysteriously hacked exchanges.

- Branny vanishing.  Again, unthinkable!  But not as unlikely as NEOBEE's Danny Brewster, Bitcointalk's  most public entrepreneur, vanishing.

What's Branny's name, BTW?


Havelock vanishes - Two times per day I am sent a list of all shareholders and their contact information (emails). In the event of HL disappearing we can work on transition to another exchange, or system that would allow business to continue.

I vanish - There's two options here #1 being untimely demise, #2 would be me taking money and running.

For #1 We have set in place several agreements for management. Ben, the owner of BuyAHash will take over management duties in the case of my death or incapacitation. From that point on he will be able to either liquidate the properties & bank accounts and disburse funds to investors OR continue management of the company. As it is, 90% of the daily operations are outsourced, and the training required to do my part is quite easy. I could create a manual of practices to help guide Benny or someone to continue the daily management aspect, or liquidation.

For #2 it would be quite difficult for me to take money and run outside of the bank accounts. Most of our larger investors have deed copies, addresses and all pertinent information for our properties. They would immediately know that this has occurred and could seek legal action.

The best option for investors, and it is one that we're pursuing is to set up a legal power of attorney locally that would have the authorization to liquidate all assets in the case of a substantial breach of trust or death. I already have messages out to several individuals locally who can do this, but haven't had enough response to get it set up fully. This would be kind of like an automatic deed in lieu of foreclosure that executes on specific financial or ethical events.

As for my name/contact information - It's been posted here twice, i won't re-post, and instead will make you go through the responses to find it.
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